Approximately 83% drop in prime retail space supply in 2012

Despite an 83% drop in supply of organised retail space across key cities in the country, 2012 continued to witness an increase in transaction activity and retailer expansion.

According to the findings of CBRE's latest report "Indian Retail Market View H2, 2012", around 2.5 million sq.ft. of fresh retail space entered the market in 2012, mainly concentrated in Bangalore, Kolkata and Pune, as against over 15 million sq.ft. in 2011.

Though this is a significant drop in prime retail supply, the market witnessed leading brands and retailers pursuing expansion plans aggressively and increasing their presence in the Tier I as well as Tier II and III cities of the country.

Developers remained focused on attracting tenants in completed properties and reducing existing vacancy levels, rather than focusing on launching new projects. Most of the supply pipeline is scheduled for completion in 2013; by when the existing vacancy levels might reduce.

Commenting on the findings of the report, Mr. Anshuman Magazine, Chairman and Managing Director of CBRE, South Asia Pvt. Ltd said, "Despite the large dip in prime retail space supply across key cities last year, the good news is that retailers continued with their expansion plans. This positive sentiment is indicative of retailers taking a long term view of the Indian economy despite the short term struggle. The Government's bold and welcome move of allowing FDI in retail has further contributed to this positive sentiment."